Houston Electricity: Compare Options and True Cost
If you live in Houston and your mailbox fills up with competing electricity offers every spring, you are in Texas's competitive retail market—not a single utility monopoly. Houston electricity shopping means choosing who sells you power while a regulated wires company keeps delivering it. That split is why two neighbors can pay different rates for the same heat wave, and why the advertised cent-per-kilowatt-hour rarely matches the check you write.
This guide explains how Houston electricity works, what drives your true cost, how to compare plans without getting burned, and where to run a live ZIP search when you are ready to switch, renew, or start service.
How Houston electricity is wired: seller vs. deliverer
Most Harris County addresses sit in the deregulated zone served by CenterPoint Energy as the transmission and distribution utility (TDU, also called a TDSP). CenterPoint delivers the power; you choose the retail plan¹. Your retail electric provider (REP) buys electricity on the wholesale market, sets your plan price, and sends the bill—but CenterPoint still owns the poles, reads the meter, and restores outages.
Four TDSPs cover competitive Texas: Oncor, CenterPoint Energy Houston Electric, Texas-New Mexico Power, and AEP Texas. Each bills your REP for regulated delivery, and that charge passes through on your invoice regardless of which brand you pick for energy supply.
The grid itself is managed by the Electric Reliability Council of Texas (ERCOT)², which schedules power across more than 55,000 miles of transmission lines and serves about 27 million Texas customers—roughly 90 percent of the state's electric load. ERCOT also processes retail switches and sends confirmation mailers when you change providers. Reliability during storms does not depend on which REP logo is on your bill; you call the TDU outage line when the lights go out.
Unlike optional choice programs in some states, customers on the ERCOT grid are generally required to choose an electricity provider³. Municipal utilities and electric cooperatives outside the competitive footprint were not required to open to competition, so a handful of Texas ZIP codes still have no retail offers. If you are unsure, the Public Utility Commission of Texas (PUCT) consumer electricity FAQs⁴ are the official starting point.
Texas opened retail competition in 1999 and most shopping began in 2002, when the PUCT launched Power to Choose⁵—the official, unbiased comparison site where certified providers post plans.
What Houston electricity actually costs
Sticker rates and true cost diverge because your bill blends energy charges (what the REP controls) with TDU delivery charges (regulated pass-throughs), plus fees, credits, and taxes.
Statewide price context
Texas uses more electricity than any other state. The 2024 Texas Electricity Profile⁶ shows total retail sales of about 505.4 million megawatt-hours—ranked first nationally—with an average all-sectors retail price of 9.79 cents per kWh (42nd among states, meaning higher than many peers).
Residential prices run higher. EIA Table 5.6.A⁷ listed Texas residential averages at 15.88 cents/kWh in July 2026, up from 15.36 cents/kWh a year earlier. The same table put Texas's all-sectors average at 10.91 cents/kWh for July 2026.
Annual residential figures tell the usage story. EIA sales and revenue data (Table 5A)⁸ for 2024 put Texas residential customers at about 1,096 kWh per month, an average price near 14.94 cents/kWh, and an average bill around $163.72—well above the U.S. residential average of roughly 863 kWh monthly on the same table. Nationally, the average U.S. home purchased about 899 kWh per month in 2022⁹—Texas air conditioning pushes Houston households toward the upper end of that range, especially in summer.
Delivery is a growing slice
Regulated TDU charges are not negotiable when you switch REPs. Reporting on the competitive market noted that CenterPoint's delivery component on a 1,000 kWh bill rose from $24.61 in 2003 to $42.41 by March 2016¹⁰—independent of whichever REP sold the energy. That is why a flashy 7-cent energy rate can still produce a triple-digit bill once delivery, monthly fees, and pass-through riders stack on.
Roughly 5% of U.S. electricity is lost in transmission and distribution¹¹ between generation and your meter—another background cost embedded in the system, though not a line item on most Texas bills.
Houston summer reality
Houston's climate means cooling dominates usage from May through September. Plans that look cheap at 1,000 kWh can punish you at 1,800 kWh if bill credits expire above a threshold, or reward high users while gouging apartments at 500 kWh. True cost is always your kWh × effective rate + delivery + fixed fees − credits, not the boldest number on a postcard.
Compare Houston electricity options the right way
When you compare Houston electricity plans, you are comparing REPs and contract designs—not the physical grid. Three channels matter:
- Power to Choose⁵ — PUCT's official marketplace where certified electric providers post eligible plans.
- REP websites and brokers — Licensed brokers such as WattKarma¹² pull the same certified catalog by ZIP and surface Electricity Facts Label (EFL) pricing at 500, 1,000, and 2,000 kWh.
- Your current renewal offer — Always benchmark it against the open market before auto-renewing.
The PUCT later required prominent display of prices at 500, 1,000, and 2,000 kWh after shopping confusion on Power to Choose¹³, when single-column teasers hid minimum-use penalties and bill credits.
Plan types you will see
| Plan type | What it means | Trade-off |
|---|---|---|
| Fixed-rate | Price per kWh locked for the contract term | Predictability; early termination fee if you leave early |
| Variable / month-to-month | Rate can change with market conditions | Flexibility; bill volatility |
| Indexed | Tied to a published index | Can track low market prices—or spike with them |
| Prepaid | Pay before you use | No deposit in many cases; disconnect risk if balance runs out |
Power to Choose's FAQ¹⁴ notes there is no switching fee unless you request a special off-cycle meter read, though breaking an existing contract can trigger REP penalties—check your Terms of Service.
Green and specialty products
Many REPs sell 100% renewable or partial green plans. The EFL discloses renewable content versus the statewide fuel mix. Specialty products—free nights and weekends, bill credits for high usage, pay-as-you-go—can win on marketing but lose on math if your usage pattern does not match the design. Treat them like any other plan: model your kWh first.
Small-business shoppers
Commercial EFLs use different usage anchors (1,500 / 2,500 / 3,500 kWh under §25.475¹⁵). Houston storefronts and light industrial accounts still receive delivery from CenterPoint while choosing a REP; demand charges and contract minimums may apply beyond what residential labels show.
Read the EFL before you trust any rate
Texas requires every residential plan to publish an Electricity Facts Label—a standardized disclosure modeled on nutrition labels. PUCT Substantive Rule §25.475¹⁵ mandates average prices in cents per kWh at 500, 1,000, and 2,000 kWh per month for homes, reflecting all recurring electric-service charges except certain taxes and state fee reimbursements.
Those three columns exist because plan math is nonlinear:
- Base charges ($9.95/month, for example) hurt low-use months most—they inflate the 500 kWh average because fixed dollars divide across fewer kilowatt-hours.
- Bill credits tied to usage bands can make 1,000 kWh look like a bargain while 750 kWh or 2,000 kWh look ordinary once the credit vanishes or dilutes.
- Minimum-use fees penalize conservation and can invert the ranking entirely.
Always open the EFL PDF linked from any offer. The disclosure chart answers: Is there an early termination fee? Can the price change mid-contract? Is the plan prepaid? What percentage is renewable?
WattKarma's Houston page¹ lets you enter a ZIP and compare live 500 / 1,000 / 2,000 kWh EFL averages side by side for residential or small-business service.
Switching, starting service, and fees
Switching REPs does not require calling your old company. When you enroll, the new REP contacts ERCOT; ERCOT notifies your previous provider and mails you a confirmation. You may cancel within three business days of receiving Terms of Service¹⁴, whether you signed online or by mail.
Key rules from PUCT consumer guidance:
- Contract expiration: REPs must notify residential customers at least 30 days before a fixed contract ends. You can switch without an early termination charge as early as 14 days before the expiration date shown in that notice; otherwise you may roll to month-to-month service (PUCT electricity FAQ⁴).
- Slamming and cramming: Switching without permission, or adding unauthorized fees, is illegal. Report issues to the PUCT consumer hotline at 1-888-PUC-TIPS (FAQ⁴).
- Deposits: A REP may require a deposit up to one-fifth of estimated annual billing for customers who cannot establish satisfactory credit (PUCT FAQ⁴).
- Prepaid service: REPs offering prepaid plans require payment in advance; usage is reconciled periodically (PUCT FAQ⁴).
- Outages: Still report them to CenterPoint (or your TDU), not your REP.
Moving within Houston? You will need your ESI ID—the premise identifier ERCOT uses—when starting service at a new address.
Houston vs. Ohio, Maryland, and regulated markets
Texas is the most fully restructured large market, but it is not the only place with choice:
- Ohio: The Energy Choice Ohio¹⁶ portal explains that customers may shop certified suppliers while the utility handles delivery—similar mental model, different price disclosure (no Texas-style EFL; compare against the utility's Price to Compare on your bill).
- Maryland: Supply choice exists, though shopping workflows differ by utility territory; the Maryland Office of People's Counsel¹⁷ publishes consumer guidance on bills, rates, and shopping.
- Regulated states: Many Americans still buy bundled service from a single utility with rates set by a state commission—no annual REP switch, but also no teaser-rate marketing.
If you are relocating to Houston from a regulated market, the biggest mindset shift is that the lowest advertised energy rate is never the whole story—delivery and plan fees travel with you.
Shopping checklist: true cost in five steps
- Pull last 12 months of usage from your REP portal or Green Button data. Calculate your average kWh—not just summer peak.
- Rank plans at your actual usage, not only at 1,000 kWh. If you average 750 kWh, weight that column heavily.
- Add delivery mentally. You cannot shop TDU rates, but you should know they are a regulated pass-through that has climbed over time (Texas Tribune analysis¹⁰).
- Read the EFL fee table for base charges, minimum-use penalties, and credit cliffs (§25.475¹⁵).
- Compare apples to apples on contract length and renewable content before you click enroll.
When you are ready to run numbers for a Houston ZIP, compare plans at WattKarma¹—enter your ZIP, toggle residential or business, and review synchronized EFL pricing across licensed suppliers serving CenterPoint territory. No fee to compare; enrollment is optional once you find a plan that matches your real usage.
Houston electricity will never be as simple as a single monopoly rate—but it does not have to be a guessing game. Know who delivers, know who sells, read the EFL at your kWh, and treat every cent-per-kWh ad as a starting point—not the finish line.